Soda Sales Fall After Tax

Consumption of soda fell by more than 20% in low-income neighbors of Berkley, California after the city passed a special tax last March, according to an article in Wednesday’s Wall Street Journal.

Soda consumption dropped by 21% in some neighborhoods

The American Journal of Public Health published a study that measured the impact of the penny-per-ounce tax that was imposed some 18 months ago. The study revealed that consumption of soda and other sugary drinks fell by 21% during a six-month period and that many residents switched to water as a result of the tax. The American Beverage Association stated that the study was flawed. The study focused on low-income neighborhoods in Berkley. When compared with similar neighborhoods in Oakland and San Francisco, those neighborhoods showed a consumption increase of 4% in contrast to the decline in Berkley.

"The greater-than-predicted reduction in consumption in Berkeley could also reflect effects of the campaign surrounding the tax, which may have shifted social norms." — American Journal of Public Health

The measure was passed by voters in Berkley by a margin of 75% to 25% in 2014. A similar measure in San Francisco had support from a majority of voters but failed to attain the required two-thirds support to pass.

Philadelphia passed a soda tax in July

Philadelphia’s city council recently passed a tax increase of 1.5 cents per ounce of sugar-added and artificially sweetened soft drinks. Business Insider reports the tax is expected to generate $91 million in tax revenue over the next year. Critics have claimed that the tax is regressive as it will have a greater impact on those with less income. It also has been criticized as being more of a revenue measure than a public health measure. Nevertheless, ballot measures to enact a similar soda tax will be on the ballot in several cities this fall, including San Franciso, Oakland and Boulder, Colorado. Over the past eight years, voters in 43 cities have rejected similar ballot measures.

Soda industry opposes consumption tax

The soda industry is unhappy with the efforts to use a consumption tax to turn customers away from its sugary drinks. Nationwide, per capita soda sales have dropped 25% since 1998, but the total number of bottles and cans purchased has risen. That suggests that fewer people are buying soda beverages, but those that are still drinking soda are buying more. The soda industry has made a significant reduction in the sugar content of its beverages in recent years as a result of increased nutritional awareness on the part of consumers.

The measure was passed by voters in Berkley by a margin of 75% to 25% in 2014. A similar measure in San Francisco had support from a majority of voters but failed to attain the required two-thirds support to pass.